NMT Medical Inc. (PINK:NMTI) began liquidating its assets in an attempt to repay its creditors.
Officials at the Boston, Mass.-based company said it entered into an Assignment for the Benefit of Creditors, effective immediately. The legal maneuver is an alternative to formal bankruptcy that transfers all of NMT’s assets to a designated party, which can then liquidate assets and distribute the proceeds to creditors.
“The purpose of the assignment is to conclude the company’s operations and provide for an orderly liquidation of its assets,” officials wrote in a prepared release.
NMT warned shareholders April 1 that it didn’t have enough money to pay for its annual earnings filing with the federal Securities & Exchange Commission. Last September NMT said its existing cash resources were “not sufficient to fund our business plans, as currently constituted, beyond the fourth quarter of 2010.”
The troubles for NMT began June 17 of last year, when it reported that its flagship StarFlex device failed to meet the primary endpoint of a clinical trial. The news sent NMTI’s stock down 79 percent that day; shares were trading at about 17 cents today, a far cry from their all-time high of $24.56.
Trying to regroup, NMT said it would "tightly manage expenses, preserve cash, evaluate financing alternatives and adjust our operating plan accordingly," as it waited for the final results of the Closure I trial to be completed in November, according to its second-quarter earnings release. In August, the company’s poor stock performance drew a first de-listing warning from the NASDAQ exchange. Later that month, former CEO Frank Martin and chairman James Mahoney stepped down, with COO Richard Davis taking the helm as chairman, president and CEO.
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